Economy expected to continue positive growth trend – PIOJThursday, November 25, 2021
Following an estimated 6.3 per cent real value added in gross domestic product (GDP) output from the local economy during July-September, the Planning Institute of Jamaica (PIOJ) has projected further growth over subsequent quarters and the remainder of the fiscal year.
Speaking at a quarterly media briefing held virtually yesterday, Dr Wayne Henry, director general of the PIOJ, said that based on preliminary estimates the institute will be anticipating a calendar year growth within the range of three-six per cent and fiscal year 2021/22 growth of six-nine per cent.
“For October-December 2021 it is projected that the economy will grow within a range of five-eight per cent. For the first nine months of 2021, real GDP was estimated to have increased by four per cent. This reflected higher real value added for both the goods producing industry, up 5.8 per cent and the services industry, up 3.4 per cent,” he said.
“The economy began the recovery process in the first half of FY2021/22, ie the April-September 2021 period, expanding by an estimated 10.1 per cent mainly as a result of a relaxation of measures implemented to stem the spread of the virus, as the rate of vaccination increased globally and locally,” Henry added.
During the review quarter (July-September), positive contributions came from most of the main sectors with the goods-producing industry increasing by some 2.8 per cent in output. This was primarily led by strong out-turns from the manufacturing and agriculture sectors recording outputs of 8.5 per cent and 7.2 per cent, respectively. The construction sector, which over the last quarters has driven the bulk of growth in this industry, recorded a mere 1.7 per cent increase, down from the 17.4 per cent seen in the previous quarter. The mining and quarrying industry was the only sector to record contractions of 31 per cent largely due to production downtimes following a fire at the Jamalco aluminum plant. The refinery is expected to reopen in 2022.
Activities in the resilient services industry reported growth of 7.3 per cent due to higher real value added from its subsidiary industries. Hotels and restaurants (114.7 per cent); other services (15 per cent); transport, storage and communication (nine per cent) and wholesale and retail (3.9 per cent) contributed the lion's share of output to this industry.
Henry said that while a positive outlook is being maintained for the rest of the year and over the next, downside risk such as a potential fourth wave and significant outbreaks of virus cases locally and in key source markets could temper performance.
“There is also the potential for a negative effect on economic activities from supply chain disruptions,” he said.
“GDP levels for the Jamaican economy is anticipated to fully recover in FY2023/24, while employment should regain its pre-COVID-19 level in FY2022/23,” he added, noting that the longer it takes for the economy to recover, the more likely it is for there to be economic scarring resulting in severe impacts, particularly for the most vulnerable.